Massachusetts Attorney General’s Office Issues Proposed Earned Sick Time Regulations

Last November, voters approved a ballot initiative granting earned sick leave to Massachusetts employees.   As we wrote in an earlier article, beginning on July 1, 2015, employees working in Massachusetts are entitled to earn up to forty hours of paid sick leave per calendar year.  Employers with ten or fewer employees are not required to pay employees during this leave but must provide unpaid leave to their employees.

Many questions were left unanswered by the text of the statute.  On April 27, 2015, the Massachusetts Attorney General’s Office released long-awaited proposed regulations.   Although the proposed regulations offer some guidance to employers, questions remain that we hope will be addressed in the final regulations that will be implemented in June shortly before the law goes into effect.  A summary of the guidance offered and the challenges that remain is provided below.

In the meantime, the AG’s Office is seeking public comment regarding the proposed regulations.  Six public hearings are scheduled to take place across the Commonwealth during May and June.  Written comments must be received by 5:00 p.m. on June 10.  Dates and times of the public hearings, and a description of the process by which the AGO will accept written comments, may be found here.  We plan on submitting written comments and welcome your input in presenting any questions you may have.

Guidance:

Employer size.  The new law provides that employers with eleven or more employees must provide up to 40 hours per year of paid sick leave.  For the purpose of determining employer size, employers must include all of their employees, including full time, part-time, seasonal and temporary employees, and interns.  Although sick time benefits need only be provided to individuals working “primarily” in Massachusetts, all employees are counted in determining whether an employer has eleven employees for purposes of the law, whether those employees work within the Commonwealth or outside of Massachusetts.

Eligibility. An employee is eligible to accrue and use earned sick time if his or her “primary place of work” is in the Commonwealth of Massachusetts.  According to the proposed regulations, if an employee works more hours in Massachusetts than in any other state (where, for example, an employee works 40% of his or her hours in Massachusetts, 30% in New Hampshire, and 30% in Maine), then Massachusetts is the employee’s “primary place of work” and all hours work count for accrual purposes.  Employees with a break in service of less than one year return to work with full credit for prior service and prior unused accruals.

Accrual and breaks in service. Nonexempt employees accrue earned sick time at a minimum rate of one hour of earned sick time for every 30 hours of work, including overtime hours. Exempt employees will be assumed to work 40 hours per week, provided that their job description or other terms and conditions of employment do not specify a lower number of hours per week.  In such a case, earned sick time accrues based on that specified number of hours per week.  In addition, employees who are rehired after a break in service of up to one year keep all previously accrued earned sick time, and their employment is deemed to have commenced as of the start of employment prior to the break in service.

Calendar Year.  Employees are eligible to earn up to 40 hours of earned sick time per “calendar year.”  The term “calendar year” is defined in the proposed regulations as “any consecutive 12-month period of time as determined by an employer.”  By way of example, the proposed regulations explain that employers may choose a year that runs from January 1 through December 31, a tax year, the employer’s fiscal year, or the year running from an employee’s anniversary date of employment.  Employers must apply the choice of “calendar year” uniformly, and must inform employees by written notice at the time of hire what constitutes a “calendar year.”

Increments.  Employers must allow employees to use earned sick time in increments of one hour or the smallest increment the employer’s payroll system uses to account for absences or use of other time.  If the employee’s absence at a specific time requires the employer to hire or assign a replacement worker, however, and if the employer does so, the employer may require the employee to use up to a full shift of earned sick time.

Rate and time of payment.  When used, earned paid sick time must be paid on the same schedule as when regular wages are paid.  Employers cannot delay payment pending receipt of written verification or documentation of the use of earned sick time.   Employees are paid at a rate equal to his or her hourly base rate wage, which rate does not include commissions, overtime, or other premium rates.    The proposed regulations provide guidance on how to calculate payment for employees who are paid on commission or who receive different pay rates depending on the tasks performed or hours worked.  In no event may an employer pay an employee a rate less than the effective minimum wage.

Carryover.  Employers must allow employees to carryover up to 40 hours of accrued but unused earned sick time from one calendar year into the next, unless the employer provides a lump sum of 40 hours of earned sick time at the start of employment and at the start of each subsequent calendar year.  Even if hours are carried over, employers are not required to allow employees to take more than 40 hours of earned sick time per calendar year.

Documentation.  The regulations seem to prohibit an employer from requiring medical verification until and unless an individual has been absent for 24 consecutive business hours.  Employees who do not have a healthcare provider may be required to provide a signed written statement that the hours were used for an authorized purpose.   Employees who take earned sick leave for fewer than 24 consecutive business hours may be asked to submit written verification that they have used earned sick time for an allowable purpose.  In no case may an employer ask employees to explain the nature of the illness or the details of the domestic violence that underlies the need to take the earned leave.  The AG’s Office will be releasing a model form that employers may use; we will provide a copy when it becomes available.

Notification.  Employers may require up to seven days’ advance written notice of foreseeable leave, provided a written policy is in place that so requires.  Employers may require employees to follow existing call-out requirements, including the requirement that an employee provide notification each day he or she is absent.  If the need for leave is unforeseeable, the employee must notify the employer of the need for leave “as soon as practicable,” and must comply with the employer’s normal policies and call-out procedures with respect to notifications of unforeseeable absences, “provided that such requirements do not interfere with the purposes for which the earned sick time is needed.”  The proposed regulations also contemplate situations where notification is not feasible, such as accidents and sudden illness, and suggest that failure to provide notification in such circumstances must be excused.

Notice and Record Keeping Provisions.  Employers must provide employees with written notice as to what constitutes a “calendar year” for accrual purposes.  Employers must provide employees with a copy of notice to be prepared by the Attorney General’s Office summarizing the law and regulations,  and must also post a notice of the law and regulations in a conspicuous location accessible to employees in every establishment where employees who are entitled to earned sick time work. Employers are expected to maintain records of accrual and use of sick time for a period of three years and provide a copy of the records upon demand by the AG.

Allowable substitution of paid time off.   An employer may choose to frontload 40 hours of sick leave at the start of employment and at the beginning of every subsequent “calendar year” rather than tracking accrual rates throughout the year.  Moreover, employers may substitute paid time off for earned sick leave if the PTO policies provide that time off:

    • accrues at a rate of no less than one hour of PTO for every 30 hours of work;
    • is paid at an employee’s same hourly rate, as defined by the regulations;
    • is accessible on the same basis, meaning that time may be taken for the authorized uses under the statute;
    • comes with the same notice requirements to employees; and
    • affords employees with the same job protections as provided under the statute.

Discipline.  Employers may discipline employees who are committing fraud or abuse by engaging in an activity that is inconsistent with allowable purposes for leave or by exhibiting a clear pattern of taking leave on days when the employee is scheduled to perform duties perceived as undesirable.   The proposed regulations clearly state that employers may consider an employee’s use of earned sick leave when offering an attendance bonus or reward, and that an employee’s failure to qualify for such a bonus or reward does not constitute interference with the employee’s rights under the law.

Payout at end of year or upon termination.  Employers are not required to pay employees accrued but unused earned sick leave at the end of the year or upon termination.  The proposed regulations provide, however, that an employer who chooses to pay employees for unused earned sick leave at the end of a calendar year may do so, provided the employer makes available at least sixteen hours of paid sick time as of the start of the next calendar year.

Transition year.  For 2015, paid leave provided prior to July 1 will be credited toward the paid leave required beginning on July 1 provided such leave was made available under terms consistent with the law and regulations.

Challenges:

Interaction with other leave policies.  The proposed regulations state that earned sick leave is in addition to time off provided by the FMLA, the Massachusetts Parental Leave Act, the Massachusetts Domestic Violence Leave Act, the Small Necessities Leave Act, “and the like,” which suggests that earned sick leave may not be used concurrently with any of these other types of leave.  In other words, the proposed regulations suggest that an employee who qualifies for FMLA leave and earned sick leave, for example, would be entitled up to a total of thirteen weeks of job-protected leave (or twenty-seven weeks, if the need for the leave qualified the employee for military-related family leave).  This interpretation presents a marked difference in the way in which Massachusetts has implemented leave laws, and we are hoping that the Attorney General’s Office will provide further clarity on this important issue.

Notification.  Practical issues abound under the proposed regulations guidance regarding employee notification.  If employers cannot require an employee to provide medical verification before he or she is absent for 24 consecutive scheduled business hours, it will be a struggle to enforce existing attendance policies and to prevent fraud.  Moreover, the proposed regulations leave many questions unanswered, including whether the prohibition against requesting medical verification applies generally or only when employees seek to use earned sick leave.  We plan on alerting the Attorney General to these and other problems attendant to the proposed regulations, and hope that the Attorney General’s Office will offer further clarification and practical guidance.

Discipline.  Although the proposed regulations allow employers to discipline employees who engage in an activity that is not consistent with allowable purposes for leave or who engage in a “clear pattern” of taking leave when the employee is scheduled to perform duties perceived as undesirable, the proposed regulations do not provide any guidance as to what would constitute a “clear pattern.”  It unclear, therefore, whether employers may discipline employees who exhibit clear patterns of arriving late on Mondays or leaving early on Fridays without facing a claim of retaliation or interference under the law.

Penalties.  The Attorney General may bring an enforcement action against employers, their officers, agents, superintendents, foremen, or employees thereof, or staffing agencies or work site employers, all of whom may face both criminal and civil penalties for violation of the law.  Penalties vary based upon whether the violation is willful or not willful, with even first-time willful violations punishable by $25,000, up to one year of imprisonment, or by both.  Repeat willful violations are punishable by a fine of not more than $50,000, by imprisonment or up to two years, or by both.  Non-willful violations are punishable by a fine of not more than $10,000 or by imprisonment for not more than six months for first offenses.  Subsequent non-willful violations are punishable by a fine of not more than $25,000, by imprisonment for not more than one year, or by both.  As has been the case with the Wage Act, we do not believe it likely that the Attorney General will bring criminal proceedings absent egregious and repeated violations.  That said, the threat is real and raises the stakes substantially.

Of greater concern is that the statute creates a private right of action for employees to sue over alleged violations of earned sick time law, with damages identical to those under the Massachusetts Wage Act.  Specifically, prevailing plaintiffs are entitled to mandatory treble damages for any lost wages and other benefits, as well as the costs of the litigation and reasonable attorneys’ fees.  Although the amount of damages available for lost earned sick time are not likely to be substantial, to the extent an employee (or group of employees) bring claims for interference with rights under the law or retaliation of exercising those rights (for example, following termination of an employee who has recently taken sick time), there may be substantial economic exposure.

Recommendations:

Employers should prepare for the July 1 effective date of the Earned Sick Time law by:

  • Review existing leave policies to determine if such policies will comply with the Massachusetts law and the proposed regulations.
  • Work with legal counsel to modify existing policies.
  • Contact their outside payroll providers to ensure that they have the ability to track and record the use of earned sick time.
  • Consider providing suggestions (either directly or through counsel) to the Attorney General’s Office by written comment or by voicing their concerns at the upcoming public hearings.
  • Check back here for updates.

Massachusetts Extends Parental Leave Rights to Employees Regardless of Gender

By Sasha Thaler

Since 1972, the Massachusetts Maternity Leave Act (M.G.L. c. 149 s. 105D) has provided eight weeks of unpaid, job-protected leave to full-time female employees who meet certain eligibility requirements, on the occasion of the birth and, more recently, the adoption of a child.  One of former Governor Deval Patrick’s last official acts was to sign into law a revision of the MMLA that extends those rights and job protections to men, beginning on April 7, 2015.

The new Parental Leave Law retains many of the key provisions of the MMLA familiar to most Massachusetts employers: Read more

Top Employment Law Changes for Massachusetts Businesses- End of Year Review

By Sasha Thaler

2014 brought a number of legislative changes which will affect Massachusetts employers of all sizes in 2015.  Here is a recap of the top 5 changes employers should be prepared for in the New Year. Read more

Mandatory Paid Sick Time- Massachusetts Voters Say “Yes”

By Jennifer Belli

On election day, Massachusetts voters approved a ballot initiative requiring employers to provide sick time to their employees.  Absent legislative repeal, the mandatory sick time law will become effective on July 1, 2015.  Organizations with eleven or more employees will be required to provide paid sick time, while organizations with fewer than eleven employees must provide unpaid sick time.  Employers should review their sick time or PTO policies in the coming months to ensure compliance by the July 1, 2015 deadline.  Employers who meet the specific requirements of the new law (including those described below) in a PTO, vacation or other paid leave policy do not need to provide a separate sick time entitlement.

Read more

Workshop: Employment Law Basics for Start-Ups and Small Businesses

On October 29, 2014, Bello Welsh will present a session on HR and Employment Law Issues for Start Ups and Small Businesses at the Cambridge Innovation Center, 1 Broadway, Cambridge, MA.

Start-up companies focus on developing their idea and bringing their product or service to market.  Small existing businesses work to implement their core business goals and strategies.  In either case, there is often little inclination or staff to pay close attention to day-to-day employee issues.    After all, how difficult can it be to manage a workforce comprised of a relatively few employees?  The answer is “very.” HR is a complicated patchwork of federal, state and local laws, regulations and requirements, most of which apply in some form to employers of all types and sizes.  HR problems can surface when least expected, and can be extremely time consuming and costly.

In this discussion, you’ll learn how to manage the complexities of Small Business HR and to minimize the risk of preventable lawsuits, penalties, and time-consuming employee-relations issues.  For example, you’ll learn about:

  • Creating and maintaining appropriate documentation, including job descriptions, offer letters, personnel policies, and other personnel documents;
  • Managing employee performance and terminations;
  • Managing leaves of absence;
  • Dealing with wage & hour issues; and
  • Handling internal complaints and investigations

The session will be held on October 29, 2014, 6:00 p.m. to 8:00 p.m. , at the Cambridge Innovation Center, 1 Broadway, Cambridge, MA, in the Charles River Room (14th Floor).

Please register at the following site:  http://tinyurl.com/qjmk3ez

 

 

 

Inflexible Leave Policies – EEOC Position is Clear Despite Court’s Disagreement

On June 30, 2014, the Equal Employment Opportunity Commission touted its recent agreement with Princeton HealthCare System to settle litigation challenging PCHS’s “inflexible” leave of absence policy under the Americans with Disabilities Act.

According to the press release published by the EEOC, PHCS maintained a fixed leave policy whereby employees were terminated if they were unable to return to work at the end of FMLA-covered leaves of absence, or after a shorter period if ineligible for Family and Medical Leave Act-related leave.  This blanket policy, the EEOC asserts, violates the ADA because it fails to consider leave as a reasonable accommodation.  To settle the case, PCHS will pay $1,350,000 and eliminate its inflexible leave policy.  The EEOC press release also celebrates of “significant resolutions of EEOC cases involving leave and attendance policies, including its settlements with Interstate Distributor, Supervalu, Sears and Verizon. Read more

NLRB Invalidates Overbroad “No Gossip” Policy

Over the past few years, the National Labor Relations Board has expanded its sphere of influence into the non-unionized workplace.  In the guise of preserving workers’ rights under Section 7 of the National Labor Relations Act (which includes the broad right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection), the NLRB has:

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Read more

CLIENT ALERT – More and More Municipalities Are Legislating Paid Sick Leave

Philadelphia is poised to join a growing list of cities and states (including Portland, Oregon; Seattle; and San Francisco) which in the last few years have begun to require employers to provide paid sick time (“PST”) to their employees. These laws allow employees to receive limited paid time off to care for their own health or the health of a family member, and, in some cases, for leave directly related to medical, social or legal services needed when an employee or their loved one becomes a victim of stalking, domestic violence or sexual abuse. Employers with pre-exiting PTO policies must ensure these policies meet the minimum accrual requirements and that employees may use the leave for the purposes provided in the laws. Employers must comply with notice and recordkeeping requirements to avoid penalties and litigation.

CLIENT ALERT – New York City Passes Ordinance Prohibiting Discrimination Based on Unemployment Status

Effective June 11, 2013, the New York City Human Rights Law is amended to prohibit employers and employment agencies from discriminating against job applicants on the basis of unemployment status. The law also prohibits employers/employment agencies from publishing advertisements for any job in New York City that indicates that current employment is a requirement or qualification for a job, or that an employer/employment agency will not consider currently unemployed individuals. Although the law provides certain clarifying provisions regarding permissible hiring practices, employers/employment agencies subject to the law are strongly encouraged to review their hiring practices, including job advertisements, employment applications, and interview practices, in order to ensure compliance with the law prior to June 11, 2013.

CLIENT ALERT – Department of Labor Issues Revised FMLA Regulations

The United States Department of Labor has issued revised regulations to the Family Medical Leave Act (FMLA) that go into effect March 8, 2013. The revised regulations implement recent statutory amendments to the military leave provisions of the FMLA, update the FMLA notice employers must post, and contain other minor changes. The revised regulations also contain a number of provisions specific to airline flight crew members, which are not relevant to most employers.

Most importantly, employers must begin posting the revised FMLA notice beginning March 8th. The revised poster is available at http://www.dol.gov/whd/regs/compliance/posters/fmlaen.pdf. The regulations continue to require that employers’ FMLA policies include all of the information contained in the FMLA poster. As such, employers must also revise their FMLA policies to reflect the revisions to the poster, including the substantive changes to the section on military leave entitlement.

If you would like more information on the changes to the regulations, a side-by-side comparison of the former and new regulations is available on the Department of Labor’s website (http://www.dol.gov/whd/fmla/2013rule/comparison.htm).